Senate Appropriations Committee Approves FY 2017 THUD Bill

Published by Peter Lawrence on Friday, April 22, 2016 - 12:00am

The Senate Appropriations Committee on April 21 unanimously approved its $56.5 billion fiscal year (FY) 2017 Transportation-HUD (THUD) spending bill and accompanying committee report. The bill provides $827 million less than FY 2016 and $2.9 billion less than the Obama administration’s FY 2017 request.

Regarding housing funding, according to the committee release, the Senate FY 2017 THUD bill includes $39.2 billion of net appropriated funding for the Department of Housing and Urban Development (HUD). This is $891 million (2.4 percent) more than the amount appropriated in FY 2016, but $446 million (1.1 percent) less than the FY 2017 request. However, after accounting for rescissions of unobligated funding from previous appropriations and estimated receipts allocated to the THUD bill, the bill is $1.46 billion more than FY 2016, but $478 million less than the administration’s FY 2017 request.

Highlights of the bill follow.

Public and Assisted Rental Housing

Project-Based Rental Assistance (PBRA)

The bill provides $10.9 billion for Project-Based Rental Assistance, which is $281 million (2.6 percent) more than FY 2016 and $85 million (0.8 percent) more than the FY 2017 request. This funding level should be sufficient to renew all contracts, and the committee declined the administration’s request to reform the medical deduction, which if implemented would have resulted in $85 million in savings. HUD will need to conduct procurement for contact administrators, but any budget adjustments resulted from this procurement likely would take effect in the FY 2018 budget request.

Tenant-Based Rental Assistance (TBRA)

Tenant-Based Rental Assistance is proposed to be funded at $20.4 billion. Of that amount, $18.4 billion is for Section 8 Housing Choice Voucher contract renewals, which is a $674 million (3.8 percent) increase over FY 2016, but $92 million (0.5 percent) less than the FY 2017 request. It appears this level of funding would be sufficient to renew all vouchers in use. The budget also proposes $20 million to support more than 2,500 new incremental family unification vouchers to prevent youth from becoming homeless after exiting foster care. The committee did not approve funding intended to complement a new Obama administration family homelessness program initiative. For the HUD-Veteran Affairs Supportive Housing (HUD-VASH) program, the bill provides $57 million, of which $7 million is set aside for Native American veterans. The proposed HUD-VASH is $3 million less than the FY 2016 appropriation serving all veterans, but $50 million more than the request, which only focused on Native American veterans. The bill also provides $110 million for Tenant Protection Vouchers, a $20 million decrease from the FY 2016 enacted level, but equal to the request.

Public Housing Capital and Operating Funds

Funding for the Public Housing Capital and Operating funds would be modestly increased under the bill: it provides $1.93 billion for the Public Housing Capital Fund and $4.68 billion for the Public Housing Operating Fund, representing a 1.3 percent and 3.9 percent increase over FY 2016 levels, respectively.

Rental Assistance Demonstration

The FY 2015 CR-Omnibus bill increased the cap on the Rental Assistance Demonstration (RAD) program from 60,000 to 185,000 public housing units, enabling all pending applications as of December 2014 to go forward as well as a few others, and the administration later proposed to repeal the unit cap in the FY 2016 and FY 2017 requests. The administration also requested $50 million for incremental funding to enable RAD conversions where such incremental funding is needed for financial feasibility, including authorization to convert Section 202 Supportive Housing for the Elderly. The bill does not eliminate the unit cap, but increases authorization from 185,000 units to 250,000 units. It also provides $4 million in incremental funding and authorizes RAD conversions of Section 202 properties.

Moving To Work

The bill ignores the administration’s FY 2017 request to rescind the language authorized in the FY 2016 omnibus spending bill enacted last December, which significantly expanded the Moving To Work (MTW) public housing demonstration program. The FY 2016 legislation directed HUD to admit 100 new public housing agencies to the MTW program over the next seven years, which is a significant increase over the current 39 participating agencies. In previous budget requests, the administration proposed a more modest expansion of MTW to only 15 new agencies. The FY 2016 omnibus bill also directed HUD to extend all of the existing MTW contracts without changes unless mutually agreed to by the public housing agency and HUD.

Community Planning and Development (CPD) Programs

The Community Development Block Grant (CDBG) program is proposed to be funded at $3 billion, equal to FY 2016 and a $200 million (7.1 percent) increase from the request. After last year’s virtual elimination, the Senate Appropriations Committee FY 2017 bill provides $950 million for the HOME Investment Partnerships Program (HOME). HOME program funding would remain 41 percent below nominal FY 2011 levels ($1.61 billion).

Homeless and Supportive Housing Programs

McKinney-Vento Homeless Assistance Grants are proposed to be funded at $2.33 billion, an $80 million (3.6 percent) increase over FY 2016 funding, but $334 million (12.5 percent) less than the request. This amount includes a $2.01 billion set-aside for the continuum of care and rural housing stability assistance programs, and $250 million for Emergency Solutions Grants.

The bill provides $505 million for the Housing for the Elderly (Section 202) program, a 16.7 percent increase over FY 2016 levels and equal to the request. The Housing for Persons with Disabilities (Section 811) program is funded at $154 million, a 2.7 percent increase from FY 2016 funding levels and again equal to the request. The budget would provide $335 million for the Housing Opportunities for Persons with AIDS (HOPWA) program to provide housing and supportive services to persons living with HIV and AIDS, which is level with FY 2016 and the request. The bill would also reform the HOPWA allocation formula to account for all those living with HIV and AIDS, rather than all cumulative cases.

Obama Administration Initiatives

Opening Doors Initiative to End Family Homelessness

The administration proposed a new $11 billion mandatory spending program over 10 years to reach and maintain the goal of ending family homelessness by 2020, as outlined by its Opening Doors Initiative. As typical with mandatory funding requests, the bill did not authorize this request

Choice Neighborhoods Initiative

The bill provides $80 million for the Choice Neighborhoods Initiative, which is designed to comprehensively revitalize high-poverty public and assisted housing communities, which is $45 million (36 percent) less than FY 2016 and $120 million (60 percent) less than the request.

Upward Mobility Project & Local Housing Policy Grants

As with the Opening Doors Initiative, the bill does not authorize the upward mobility project or local housing policy grants.

Next Steps

The U.S. Constitution requires that appropriations bills originate in the House, so it was unusual and remarkable that the Senate Appropriations Committee acted on its FY 2017 THUD bill before the House. Indeed, if the full Senate were to take up the Senate Appropriations Committee-approved bill, it could not simply pass it and send it to the House, because of this constitutional provision.

However, there are a few spending bills originating from the House left over from last year but still technically active in the current Congress. The Senate could consider one of those bills, and amend and replace it with the Senate Appropriations Committee-approved bill, if Senate Majority Leader Mitch McConnell, R-Ky., decides to do so.

Nevertheless, neither McConnell nor Senate Appropriations Committee Chairman Thad Cochran, R-Miss., has decided when to consider the bill on the Senate floor. The House Appropriations Committee is reportedly planning to consider its FY 2017 THUD bill in the next couple of weeks.

But even if the full Senate approves Senate Appropriations Committee-approved THUD bill and the House Appropriations Committee follows suit, it appears likely that Congress will resort to passing another temporary stopgap funding bill, or continuing resolution, to fund the federal government from Oct. 1 until after the November election.

The House has abandoned any attempt to pass a FY 2017 budget resolution, instead relying on the Bipartisan Budget Act of 2015 to set the overall FY 2017 discretionary budget at $1.07 trillion, from which the 12 annual spending bills are allocated funding. In light of the House’s difficulties in getting a budget resolution passed, there will likely be problems getting all 12 spending bills, including the THUD bill, passed by the entire House before Oct. 1, not to mention being approved by the president.

So, as is often the case in presidential election years, the November election will have a big impact on the course of the final FY 2017 THUD bill.